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24 Dece mber mber 20052005

So now we know what exactly it takes for our politicians to sink their differences, prejudices, competitive instinct, everything. Even more than cricket or war, it is real estate. In our two biggest cities, Mumbai and Delhi, the entire political class is now getting together to confront the judiciary on the issue of unauthorised constructions. The Maharashtra assembly has been discussing ways to amend the law to let encroachers in the predominantly Sindhi refugee suburb of Ulhasnagar carry on living in their unauthorised properties, overturning a high court verdict that these be demolished forthwith. The political effort to block these demolitions comes despite the fact that one of the government’s own committees (headed by Nand Lal, widely acknowledged to be an upright officer) has documented in detail how local land mafias, in cahoots with municipal officials, have built an almost entirely illegal colony. Never mind also that the leading light of this unholy alliance was strongman Pappu Kalani.

But even this is tiny compared to what is going on in Delhi. For almost a week, as municipal bulldozers and hammers went about gingerly demolishing a few unauthorised buildings, mostly on

encroached government land, under high court orders, legislators of the Congress and the BJP got together to press for a new law to give amnesty for all illegal buildings, and for amendments to the new master plan. So desperate has the political class in Delhi become, it even passed a resolution (unanimously, of course) in the assembly, asking the municipal corporation to stop demolitions. And

hen it didn’t, they served a privilege notice on the municipal commissioner.

The politicians are not fighting for the poor, or for principles. They are doing all this to bestow on the capital’s well-to-do the power to break every building and zoning law in the book. The truth is, this is not about votes. After all, buildings on the demolition list now are just around 18,000 and even if you count, say, five votes on an average for each affected family, it is no more than a lakh of votes in an electorate of nearly 90 lakh.

They are fighting, instead, to protect their own, very special privilege to break property laws at

ill. They need that privilege because property, and its misuse, has now become one of their main sources of income. Not only do they break these laws merrily for their own properties, but also because so many of them are involved with real estate mafias.

Why does reform in some areas of our infrastructure proceed much faster than in others? Anything that does not involve real estate moves much faster. Telecom is a good example. Anything that involves land takes much longer. One of the biggest roadblocks to the national highway project is land acquisition. The Mumbai airport modernisation has run into the challenge of clearing its own

land of encroachments. Work in Delhi’s Commonwealth Games Village has not begun yet because the Uttar Pradesh government, which owns a small part of the land to be acquired on Delhi’s side of the Yamuna, does not want to part with it. You go around the country listing delayed or blocked infrastructure projects, and you will find one common thread: land. In a reforming economy, licences, quotas, FDI clearances, phone connections, power and rail wagon allocations have all moved out o the politicians’ discretionary powers. Their clout is entirely intact in only two areas, property and policing. And they will not let it diminish. That is why the two most difficult reforms in India are to

do with policing and property. One of the very few powers a politician can use unabashedly and ithout any accountability is his police. He can jail his opponent, get journalists thrashed and make sure his loyalists go scot-free even for major crimes. The second is property. This is why Gowda hated the IT industry so much; IT firms did not have to go to politicians like him for anything. Then he figured there was one thing they had to come to him for: land. That is when he hit back at Narayana Murthy.

Now you know why our politicians will not reform our property laws, modernise land records, cut stamp duties and do other simple things to bring real estate out of the grip of the black economy. Now you know why even a pro-reform Congress–NCP government in Maharashtra would not abolish the urban land ceiling law, which most other major states have done.* It won’t, because politicians are desperate to hang on to the few discretionary powers that remain. These powers are their ticket to personal fortunes, in cash and property.

I cannot conclude this without telling you my favourite real-estate-and-politics story. Nawaz Shari once insisted I travel from Islamabad to Lahore on the eight-lane motorway he had built and was so proud of. He even sent me his newest Mercedes so I could really enjoy the ride. The motorway was

onderful, but it was also empty. So I asked the driver, from the prime minister’s staff, the reason hy nobody seemed to be using the highway. ‘Because,’ he said, ‘it is nearly a hundred kilometres longer than the Grand Trunk Road built by Sher Shah Suri more than five centuries ago.’ He explained hy. The moment Mian Saab (Sharif) announced the plans to build his dream highway, all his key partymen from Punjab made sure it passed their villages. Meanwhile, they bought large parcels o

land en route. These then had to be acquired at exaggerated prices, fixed by themselves, and so what should have been a brilliant idea actually became a white elephant.